Kenmore Undressed

Let the Games Begin: Kenmore Home Sales Commence in 2009

Kenmore maintained a large inventory of single family homes in 2008. On any give day there were over 200 homes for sale; however, this changed in November and December. Today the inventory has dropped quite a bit as there are 149 active listings:

SNAPSHOT OF ACTIVE LISTINGS TODAY

The majority of homes are between $350,000 and $550,000. The average days-on-market are a little over 3 months. I’ve noticed that a lot of resale homes have dropped out of the game since November. We may see them return as Spring approaches (and the sellers sober-up about pricing). Even so, 44% of listings have experienced price reductions, some being significant. It’s also interesting to note that almost 35% of the homes for sale today are new construction.

PENDING SALES - LARGE % OF SHORT SALES

The good news is that houses are selling in Kenmore. The bad news is that 58% of the pending sales today are SHORT SALES. For those of you unfamiliar with the process of short selling a home, I highly recommend you read: How To Do a Shortsale to better understand the process. The Wikipedia definition is helpful:

In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor.

We are living in some extremely challenging times. If you, members of your family or your friends feel that they are having trouble making their mortgage payments, it is imperative that you/they seek the advice of an attorney to determine if a short sale is your best course of action. There are some serious consequences as a result of selling your home short, most of which are negative: Tax exposure, Credit Damage, Legal Problems and a myriad of other issues. Although one might be tempted to choose this course, there may be better alternatives. I highly recommend you contact the law offices of Dale J. Galvin of Galvin Realty Law Group with your questions. Click on the picture below for more information about Dale and his services:

Only time will tell if Barack Obama’s new administration will have a positive influence on the real estate market. Many of the economists I’ve been listening to (cranky folk they are!) feel that we’re in for a tough 2009. I’d like to make this point in spite of all the bad news: If you are ready to buy a home, you need to do your homework. Assemble a team of professionals (e.g. mortgage lender, real estate agent, accountant and attorney) and proceed with confidence!

Utterly Confused Courtsey of inju

December 2008 Kenmore Home Sale Statistics

Today the Northwest Multiple Listing Service released it’s monthly press release for December 2008. The results from 2008 were as one would expect - heart breaking. It was not hard for market observers to guess that the sour financial markets and the insane weather this last month basically knocked-out home sales with a big left hook in the last round of 2008. Ouch! Bloody nose!

I’m going to stick with basic home sale statistics for Kenmore in this post. In the next several days there is going to be a lot of year-end data and analysis that I will share with you. For now, let’s keep it simple and local. Just click on the graphs for a large, more detailed image:

UNITS SOLD

UNITS SOLD, 4-YEAR TREND

Numbers: 2005 - 42 sold, 2006 - 24 sold, 2007 - 19, 2008 - 13

There has been a steady decline in home sales here in Kenmore since 2005. What’s interesting is how precipitous the decline was between 2005 and 2006. The change was not as significant comparing this year to last, a sign that the market was already weakening two years ago.

AVERAGE PRICE

AVERAGE PRICE - 4 YEAR TREND

PRICES: 2005 - $388,000, 2006 - 470,000, 2007 - 430,000, 2008 - 438,000

The media has been quick to point out that prices in the Seattle area have fallen to 2006 levels. Kenmore seems to be experiencing more of a flattening-out since the beginning of 2007. Home owners in Kenmore haven’t been immune from a stagnant increase in equity. It may be some time before we make up the losses in the last three years.

DAYS-ON-MARKET

DAYS-ON-MARKET - 4 YEAR TREND

DAYS TO SELL - 2005 - 48 DAYS, 2006 - 70, 2007 - 62, 2008 - 103

A lot of agents are reporting how difficult it has been to sell homes in the current market. As you can see, it’s taking over 100 days on average to sell a home. If you’re going to enter the market in the current environment, it is critical that you have your home priced aggressively and ensure that it is properly presented (dressed for success). Even though interest rates have dropped to historic lows, buyers are still sitting on the sidelines in the hope that prices will fall further.

If you are considering selling or purchasing a home, please give me an opportunity to consult with you to explore your options. Even though there are a lot of “experts” saying that it’s an ideal time to buy a house, you owe it to yourself and your family to work with an agent familiar with the market.

Statistics Often Lie courtesy of mac steve

Estately.com, Technology and the Future of Real Estate Services

The Real Estate gods must have been connecting the agent subconscious yesterday. As I was writing about the influence of technology on the real estate industry, Ardell DellaLoggia of Rain City Guide was writing an extremely thought provoking post entitled: Open Letter to NWMLS and Local Agents. Ardell asks us to consider the functionality of the MULTIPLE LISTING SERVICE which is the hallmark database used by real estate agents. In short, she believes the system is broken and it needs repair. It no longer adequately addresses the needs of the consumer or, for that matter the agents.

I agree. I believe that the age of agent-controlled multiple listing services are coming to an end, much like the Alaskan Way Viaduct here in Seattle. They are functional, utilitarian (if you have access), ugly and fatally flawed by an outside source (e.g. The 2000 Nisqually Earthquake). Those of you who have driven over the Viaduct know what I’m talking about: it certainly gets you where you need to go, but access to it is limited, it’s claustrophobic and your choices of exits are limited. One feels trapped. Knowing it could fall down at any moment isn’t comforting either! There is hope on the way and one of the cavalry is Estately.com.

Estately.com very well may be the future of consumer real estate services in terms of property research and statistics and agent referrals. It’s not yet ready to take on the multiple listing services; however, there are a lot of very smart people behind the scenes at Estately who may very well break the information log jam created by the real estate insiders.

Galen Ward, the CEO and co-founder of Estately deserves the credit for putting together a wonderfully functional system at Estately. As a Realtor who focuses-in on Kenmore, WA I was impressed with the ability of Estately to provide excellent real estate data for Kenmore. Additionally, if one wishes to work with a neighborhood specialist, Estately provides referral services.

As I mentioned above, large structures like the Alaskan Way Viaduct don’t last forever. Sooner or later an earthquake or other huge event breaks them. In the coming years, I believe the real estate industry is going to be broken apart and re-tooled by new technology and new business models that allow consumers a much wider range of options. This isn’t news, but we are beginning to see evolutionary services such as Estately more and more. Change is inevitable and I’m looking forward to what’s coming.

Kenmore, WA Home Sales: Almost-End-of-2008 Recap

I’ve broken out the 2008 Kenmore, WA home sale statistics into some interesting categories so you can get a sense of how the housing market has performed this year. I realize we don’t have the year-end numbers yet, but a number of my friends and neighbors have been asking me if the market is as bad as the media says it is. The following charts might put some things in perspective. You can see larger versions of the charts if you click on them:

SALES BY VOLUME - MEANING THE TOTAL VALUE OF GOODS SOLD

The charts below show a steady drop in the total sales revenue generated in the last several years. Between 2006 and 2007 there was a 2.5% change in sales revenue; however, we saw a -48% drop between 2007 and 2008.

2008

2006-2008

HOME PRICES

This is probably the category of statistics that’s the most difficult to interpret. If you look at the three-year chart it’s a crazy zig-zag of prices. Basically, the largest drop in price actually happened in 2006-2007. We’ve basically seen a leveling-off in prices in 2008. This is due, in large part, to the small number of sales.

2008

2006-2008

UNITS SOLD

These numbers speak for themselves. We started out 2008 with about 50% fewer sales and this trend continued throughout the whole year.

2008

UNITS SOLD 2006-2008

DAYS ON MARKET

The number of days it took to sell a home in Kenmore increased for most of the year. Things have leveled-off the last several months.

2008

DAYS ON MARKET 2006-2008

Once again, the home sale numbers for Kenmore are sobering. This year I observed a reluctance of sellers to accept the deteriorating market prices. As a result, through most of the first half of the year, homes were languishing on the market. It was only after the real bad financial news hit in August-September that prices started to drop or sellers took their homes off the market. In the last several months the number of active single-family-homes dropped from over 200 closer to 170. Not a great drop, but it was an adjustment that took far to long to occur.

All-in-all, the Kenmore housing market reflects what’s going on in many cities in the Northwest. It will be interesting to see if this trend continues in 2009. Unless the Credit markets thaw, I fear more of the same.

Real Estate Sobriety or Facing the Five Stages of Grief

THE FIVE STAGES OF GRIEF

DENIAL, ANGER, BARGAINING, DEPRESSION, ACCEPTANCE

A little over a year ago I attended a “team meeting” at the Keller Williams Realty office where I hung my license. I remember that day clearly because there were a lot of angry and frustrated agents who were having trouble selling houses. What, they wondered, was wrong? At that time I think we all had a sense that something had shifted out there in the world, we just did not know exactly what it was. Our broker and one of our more “market savvy” colleagues had some unsettling news: Experts were saying that serious problems existed with the sub-prime markets, that something was terribly wrong with mortgage backed securities, and economists had concerns the housing bubble was going to burst………

Needless to say, four of the  five stages of grief were expressed in that single meeting. There were a lot of angry and scared agents who simply could not believe the world was going to change (big time denial). Now that 2008 is quickly coming to an end, it seems that there are a lot of other things to grieve about:

• Revelations that those in charge of the financial markets have engaged in de facto fraud for many years. Even Alan Greenspan was shocked!
• Confessions by elected officials at the highest levels of government that they have deceived the American people regarding torture, wire-tapping, war and a myriad of other things.
• The realization that literally trillions of dollars have evaporated from our 401k’s, pension funds, stock portfolios, etc.
• Facing the ugly fact  that some of our most cherished and powerful institutions have squandered wealth by overpaying executives, neglecting research and development and focusing on the short-term.
• Watching corporate America ask for hundreds of billions of dollars in aid from the federal government
• Witnessing a tangible lowering of our standard of living, stagnating wages and the inevitable “class warfare” and finger pointing that results when people feel betrayed.
• And let’s not forget the shrinking equity in our homes and our inability to sell them or, worse yet, the huge number of foreclosures and bankruptcies looming on the horizon.

Not long ago, I finally realized that almost every real estate agent I know, including myself, is grieving about our industry. Oh, there are some Realtors who maintain the optimistic position that “things will get better.” Today, I even read a blog post entitled “Grow Where You are Planted” intended, I’m sure, to help us all get through these tough times.

I hate to say it, but this sort of thinking has limited value when one confronts the brutal facts: housing prices in our area continue to drop; lower mortgage interest rates will not affect home sales significantly; credit remains virtually frozen and there are a huge number of real estate agents who are leaving the business. In today’s Seattle PI article entitled “Property prices to rebound in ‘009, some brokers say,” some of these brutal facts are confirmed. The optimists believe we will see some recovery in the housing markets by the Spring of 2009; however, the vast majority of experts believe the Northwest is in for a long, slow recovery.

I would like my readers to know that I am still an active, practicing Realtor/real estate agent. Just for good measure you should know that I’m also an Associate Broker (wow!!!). I have been writing Kenmore Undressed.com since April and, during that time, I have become far more observant of the local housing statistics and I’m more involved in my community than ever before. I consider myself to be a true expert in residential real estate in Kenmore, WA. Let me also say that I’M SOBER ABOUT THE CURRENT REAL ESTATE MARKET. I make it my job to know what’s real and what’s not. I think I’ve crossed over from a sense of DEPRESSION and I’ve ACCEPTED the way things are. The world has become a far more complicated place these days, but I’m ready to face the challenges. I wish the same for you.

Five Stages Photo courtesy of

COCOMARIPOSA - http://www.flickr.com/photos/8463160@N08/

I Love Snow………….EXCEPT IN THE SEATTLE AREA…YUCK

Over on Gigharborundressed.com my esteemed colleague, Matt Thompson, mentions that he LOVES snow. It’s interesting that we both grew up in Utah: Matt in Park City and I in Layton/Salt Lake City. Funny thing is, I love snow as well……………….BUT I ABSOLUTELY HATE WHEN IT SNOWS IN THE SEATTLE AREA!!!! Whew……glad I got that off my chest. Even so, it sure is pretty:

UNIVERSITY OF WASHINGTON

I took these pictures at the University this morning after first taking friends to SeaTac Airport and then dropping my wife off at work (at the UW). The traffic was literally insane! I’m surprised anyone survived out there!

MY NEIGHORHOOD IN KENMORE (BRIDLE PATH)

As you can see, my neighborhood is blanketed in a few inches of fluffy snow. Pretty but I hate it! I can’t wait until the weather returns to “normal.”

Oh, there is one creature that had the good sense to stay in today:

MY CAT

Kenmore, WA Home Sales - Final Statistics for November 2008

The November 2008 real estate sales statistics for Kenmore were to be expected given the chaos and uncertainty gripping the overall economy. As I’ve suggested in earlier posts, our financial system is paralyzed without two of the most important ingredients for success: CONFIDENCE & COMPETENCE. Until buyers and sellers feel that the market makes sense, it will remain extremely difficult to bring them to the table. Until lending institutions begin to loosen underwriting standards, even qualified buyers will hesitate to make offers. It’s ironic, because home prices are attractive right now. Here are the numbers:

KING COUNTY SINGLE FAMILY HOME SALES

Click on the picture below to see the details:

Sales of single family homes were down -58% in Kenmore from a year ago (8 in 2007 vs 19 last year). Year to date sales are down -44%. Prices have dropped 9% since the beginning of 2008.

I wish I had better news regarding real estate sales in our community. It’s been a pretty tough year.

November Month-End Statistics: Kenmore, WA Home Sales

Kenmore’s home sales moved at a glacial pace in November. Only 12 homes closed between November 1 and November 30. There are 19 pending sales. The current active inventory remains relatively high (171).

Let’s look at the homes that are active listings:

As one can see, the bulk of the inventory is listed from $350,000 - $550,000. Only 42% of the homes are still listed at their original price. Of the remaining 58% on average, the sellers have lowered the price by almost 10%.  38% of the homes are new construction. The overall days-on-market is 158 (days). Let me say here, that these statistics should send a clear message to the sellers: THE MARKET IS EXTREMELY SOFT right now. If you don’t have to sell…..TAKE YOUR HOUSE OFF THE MARKET! Either that or systematically lower your price, get your house de-cluttered. If you feel as if your agent isn’t doing what he/she promised: FIRE HIM/HER! Tough love is fashionable.

Now, let’s take a look at the Pending Sales:

There are currently 17 pending sales in Kenmore. Above, I’ve highlighted the  7homes that are pending at the original list price (that’s 41%). It’s interesting to note that the rest of the pending homes are showing a 10% drop from the original list price (seems like a pattern here). Not also that the days-on-market are 170. With the exception of the 1st home, most of the full-priced listings are selling in far fewer days than their counterparts.

Finally, homes that sold in November:

Only 12 homes sold in Kenmore in November. That’s only 7% of the total listed homes. On average, homes sold for 90% of the original list price. Days on market were fairly reasonable because these sellers were, simply put, serious about selling their houses.

Overall, not a great month for Kenmore home sales. The economic downturn and difficult lending environment have made home sales difficult. Nevertheless, sellers seem to be deluding themselves about the pricing, marketing and representation of their homes.

Are Real Estate Agents Really Working Harder? A Complicated Question

The Real Estate section of yesterday’s Seattle Times tackles one of the most fundamental and important topics in the real estate industry today: what value does a real estate agent bring to the purchase or selling of a home. The article entitled “Slow housing market means more hours, more expenses for agents,” focuses-in on the increased effort and cost agents incur in today’s tough marketplace in order to be successful.

What I find most revealing about this particular article is the following confession:

“The days of just taking the listing and putting it into the [Multiple Listing Service] and letting the MLS sell the property are gone,” said Brigitte Pascutoi, managing broker at John L. Scott Real Estate’s Bellevue North office. (quote from the article)

This may be over-stating the simplicity of a real estate transaction; however, it should be no surprise to the public or, more importantly, the real estate agents themselves that times have changed. In 2004-2007 our local market was overheated to the point of third-degree sun burn. Almost 70% of listed homes were selling each month and prices were increasing at double-digit levels. Lending was, let’s say, more liberal (this is a whole other subject) and it was truly the case that merely putting one’s home in the multiple service was enough to bring a buyer through the front door and sell the house.

Fast forward to today:

• Only 9%-11% of homes are selling each month
• There are almost 50,000 homes for sale in the multiple service
• Buyers, even willing buyers, are having difficulty obtaining a loan
• Credit markets have been frozen
• Home prices are contracting
• There is a vacuum of confidence in the marketplace
• Technology has revolutionized the relationship between consumers and the marketplace
• Owners must now pay with real money (not fake equity) to sell their home

These trends, among many others, have forced the Real Estate Industry to make huge changes in its business model. It has also revealed many of the weaknesses of agents, brokerages and business practices. I won’t go into the subject of commissions in this post, but I will say this: I’m not sure that agents are, indeed, working harder nor am I convinced that “working harder” is what they should be doing. Let me explain:

• We would not have almost 50,000 homes for sale in this marketplace if agents were advising clients to take their homes off the market UNLESS THEY MUST SELL! This isn’t hard work, it’s professional representation (something that became less valuable when the market was humming along).
• The article points out that some agents are helping owners by doing yard work, putting in crown molding, etc.. I would submit to you that this is hard work, BUT, real estate agents are rarely qualified to do this work. More importantly, they should not be expected to. An agent may recommend a landscaper or contractor to do these chores, but an agent runs the risk of taking on a mantle of expertise that he/she may be held liable for.
• Many agents have been offering FREE staging services or any number of other benefits to sellers to better market the property. Here’s something all you sellers need to know. NOTHING IS FREE IN THE REAL ESTATE BUSINESS. The article rightly points out that proper staging and preparation of a home can run into thousands of dollars. In the old paradigm, when the marketplace allowed sellers an easy sale, non of this was as important. Sellers would gladly (or maybe not-so-gladly) pay a high commission to an agent with an expectation that marketing was happening. We all know this was not the case and this lack of integrity on the part of the industry led to a consumer backlash that continues to this day.
• Finally, sellers need to start putting skin into the game. Indeed, there’s a lot of blame we can heap on agents, NAR, and a lot of other players in this industry, but ultimately sellers must realize that agents should not be expected to take on all the costs of selling YOUR home. Put another way: Don’t expect agents to take your listing at a reduced commission and then demand the agent to overprice your house, pay for staging, marketing, open houses, professional photography, landscaping, your title report………and carry these costs for the average three to 8 months it’s taking to sell a home in this market. On the flip side, if you are willing to pay an appropriate commission, demand that the agent use professional services and hold the agent accountable for these activities.

I know I’ve gone on a bit here; however, I believe we all need to be more up-front about the current state of the real estate market. There are no magic bullets. There is no amount of hard work that will make this process easier. As the article correctly points out, this is a business based on trust and relationships. I have been in this business going on eight years now and I can tell you, after helping a huge number of families buy and sell homes, real estate can be complicated, emotional and difficult. When the time comes, choose your real estate agent wisely.

Picture by mrsdalloway

Mid-November Home Sale Statistics for Kenmore

At the risk of sound like a broken record, mid-month home sales in Kenmore look like a flat-line emergency room patient. As you will see from the charts below, the inventory has dropped over the last two months. In the early autumn, Kenmore had an active  inventory hovering slightly above 200 homes. We’re down to 175. Most of the drop is due to sellers taking their homes off the market. I’m actually happy to see a smaller inventory as this gives qualified buyers a chance to purchase homes from motivated sellers:

On the flip side, there aren’t many pending sales (19) and only three homes have closed this month (so far):